Brent Holds Near Two-Week Lows as Gulf Supplies Improve

Oil prices have held near their lowest levels in over two weeks as supplies from the Gulf region improve and worries about potential US diesel export restrictions weigh on the market. Brent crude futures rose by $1.33, or 1.34%, to $100.58 a barrel this afternoon, while West Texas Intermediate (WTI) futures gained 65 cents, or 0.72%, to $91.17.

The Brent benchmark hit its lowest since September 8 at $97.36 in the previous session, and WTI touched its lowest since September 1 earlier today. Meanwhile, European low-sulphur gasoil's premium to Brent crude futures hit a record of about $95 a barrel after US President Donald Trump said he backed the idea of a diesel export ban.

Ole Hansen, head of commodity strategy at Saxo Bank, noted that 'Brent is being underpinned by surging gasoil prices amid renewed worries the US may introduce a diesel export ban.' However, analysts have warned that such a measure would do little to ease high energy prices and could worsen supply and economic disruptions around the globe.

The improved supply outlook has been supported by Saudi Arabia's decision to reopen its East-West Pipeline to the Red Sea yesterday. The pipeline had been closed due to drone attacks on September 11, which forced Saudi Arabia to halt crude loadings at Yanbu port. Additionally, Iraq is increasing oil exports, with its oil minister stating that the country is exporting more than three million barrels per day and expects to boost exports via Turkey to over 600,000 barrels per day.